Chapter 15 Mortgage Calculations Yield Analysis Ratios
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This document discusses various mortgage calculations and concepts. It begins with an example comparing the present value of receiving $1,000 in 5 years versus $2,000 in 10 years at different discount rates. It then covers key characteristics of mortgages including payment amounts, loan balance, lender yield, and present value of debt. Specific mortgage types like interest only, balloon, and commercial loans are defined. It concludes with an example yield analysis showing how to calculate rates of return for the equity investor and lender.
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Chapter 15 Mortgage Calculations Yield Analysis Ratios
- 1. Chapter 15
- 2. Chapter 15 Mortgage Calculations
- 3. What would you rather have?
- 4. What would you rather have? 1,000 in 5 years
- 5. What would you rather have? 1,000 in 5 years or
- 6. What would you rather have? 1,000 in 5 years or 2,000 in 10 years?
- 7. What would you rather have?
- 8. What would you rather have? Years 5 10
- 9. What would you rather have? Years 5 10 FV 1,000 2,000
- 10. What would you rather have? Years 5 10 FV 1,000 2,000 10% 620.92 771.09
- 11. What would you rather have? Years 5 10 FV 1,000 2,000 10% 620.92 771.09 20% 401.88 323.01
- 12. What would you rather have? Years 5 10 FV 1,000 2,000 10% 620.92 771.09 20% 401.88 323.01 Depends on the discount rate
- 13. What would you rather have? Years 5 10 FV 1,000 2,000 10% 620.92 771.09 20% 401.88 323.01 Depends on the discount rate
- 14. What would you rather have? Years 5 10 FV 1,000 2,000 10% 620.92 771.09 20% 401.88 323.01 Depends on the discount rate
- 16. Five Characteristics payment amount & frequency
- 17. Five Characteristics payment amount & frequency loan balance
- 18. Five Characteristics payment amount & frequency loan balance lender’s yield (IRR)
- 19. Five Characteristics payment amount & frequency loan balance lender’s yield (IRR) effective borrowing cost
- 20. Five Characteristics payment amount & frequency loan balance lender’s yield (IRR) effective borrowing cost present value of the debt
- 21. Loan Balance
- 22. Loan Balance calculate the present value of the remaining payments
- 23. Loan Balance
- 24. Loan Balance 100,000 at 30 years at 10%
- 25. Loan Balance 100,000 at 30 years at 10% PMT 10,607
- 26. Loan Balance 100,000 at 30 years at 10% PMT 10,607 After 10 years?
- 27. Loan Balance 100,000 at 30 years at 10% PMT 10,607 After 10 years? 20 years at 10% at 10,607
- 28. Loan Balance 100,000 at 30 years at 10% PMT 10,607 After 10 years? 20 years at 10% at 10,607 PV 90,303
- 30. Lender Yield (IRR) 100,000 at 30 years at 10%
- 31. Lender Yield (IRR) 100,000 at 30 years at 10% PMT 10,607
- 32. Lender Yield (IRR) 100,000 at 30 years at 10% PMT 10,607 Points 5,000
- 33. Lender Yield (IRR) 100,000 at 30 years at 10% PMT 10,607 Points 5,000 95,000 at 30 years at 10,607
- 34. Lender Yield (IRR) 100,000 at 30 years at 10% PMT 10,607 Points 5,000 95,000 at 30 years at 10,607 i = 10.63%
- 35. Chapter 16
- 36. Chapter 16 Commercial Mortgages
- 38. Commercial vs. Residential more risk
- 39. Commercial vs. Residential more risk shorter terms
- 40. Commercial vs. Residential more risk shorter terms higher down LTV
- 41. Commercial vs. Residential more risk shorter terms higher down LTV non-recourse
- 42. Commercial Loans
- 43. Commercial Loans Construction Loan Permanent Loan
- 44. The Note
- 45. The Note payment amount and timing penalties for late payments insurance maintenance default
- 46. Interest Only
- 47. Interest Only pay only interest
- 48. Interest Only pay only interest pay principal balance at maturity
- 49. Interest Only pay only interest pay principal balance at maturity
- 50. Interest Only pay only interest pay principal balance at maturity “bullet loan”
- 51. Interest Only pay only interest pay principal balance at maturity “bullet loan”
- 52. Balloon Mortgage
- 53. Balloon Mortgage amortize over 25-30 years
- 54. Balloon Mortgage amortize over 25-30 years maturity 5-15 years
- 55. Balloon Mortgage amortize over 25-30 years maturity 5-15 years
- 56. Balloon Mortgage amortize over 25-30 years maturity 5-15 years must be prepared to payoff loan at maturity
- 57. Balloon Mortgage amortize over 25-30 years maturity 5-15 years must be prepared to payoff loan at maturity
- 58. Ratios
- 59. Ratios LTV - loan to value ratio loan Ă· value DCR - debt coverage ratio NOI Ă· debt service
- 60. DCR
- 61. DCR 1.3 to 1.5
- 62. DCR 1.3 to 1.5 how much NOI is there available to make the debt payment?
- 63. DCR 1.3 to 1.5 how much NOI is there available to make the debt payment? cushion to cover
- 64. DCR 1.3 to 1.5 how much NOI is there available to make the debt payment? cushion to cover
- 65. Chapter 18
- 66. Chapter 18 Investment Decision Ratios
- 67. Yield Analysis
- 68. Yield Analysis How can you improve yield? ! Leverage
- 69. Two Elements
- 70. Two Elements Equity - owner
- 71. Two Elements Equity - owner Debt - lender
- 72. Yield Analysis
- 73. Yield Analysis Purchase Price 1,000,000
- 74. Yield Analysis Purchase Price 1,000,000 NOI 100,000
- 75. Yield Analysis Purchase Price 1,000,000 NOI 100,000 Overall Rate 10.0%
- 76. Yield Analysis Purchase Price 1,000,000 NOI 100,000 Overall Rate 10.0% Loan 750,000
- 77. Yield Analysis Purchase Price 1,000,000 NOI 100,000 Overall Rate 10.0% Loan 750,000 Years 30
- 78. Yield Analysis Purchase Price 1,000,000 NOI 100,000 Overall Rate 10.0% Loan 750,000 Years 30 Rate 8.0%
- 79. Yield Analysis Purchase Price 1,000,000 NOI 100,000 Overall Rate 10.0% Loan 750,000 Years 30 Rate 8.0% Payment 66,621
- 80. Yield Analysis
- 81. Yield Analysis
- 83. Yield Analysis Value NOI
- 84. Yield Analysis Value NOI Rate
- 85. Yield Analysis Total Value NOI Rate
- 86. Yield Analysis Value NOI Rate Total 1,000,000
- 87. Yield Analysis Value NOI Rate Total 1,000,000 100,000
- 88. Yield Analysis Value NOI Rate Total 1,000,000 100,000 10.0%
- 89. Yield Analysis Debt Value NOI Rate Total 1,000,000 100,000 10.0%
- 90. Yield Analysis Value NOI Rate Debt 750,000 Total 1,000,000 100,000 10.0%
- 91. Yield Analysis Value NOI Rate Debt 750,000 66,621 Total 1,000,000 100,000 10.0%
- 92. Yield Analysis Value NOI Rate Debt 750,000 66,621 8.9% Total 1,000,000 100,000 10.0%
- 93. Yield Analysis Value NOI Rate Debt 750,000 66,621 8.9% Equity Total 1,000,000 100,000 10.0%
- 94. Yield Analysis Value NOI Rate Debt 750,000 66,621 8.9% Equity 250,000 Total 1,000,000 100,000 10.0%
- 95. Yield Analysis Value NOI Rate Debt 750,000 66,621 8.9% Equity 250,000 33,379 Total 1,000,000 100,000 10.0%
- 96. Yield Analysis Value NOI Rate Debt 750,000 66,621 8.9% Equity 250,000 33,379 13.4% Total 1,000,000 100,000 10.0%
- 98. Effective Gross Income Multiplier
- 99. Effective Gross Income Multiplier Price Ă· EGI
- 101. Operating Expense Ratio Expenses Ă· EGI